RACL Geartech

Report on the Financial Statements
 
We have audited the accompanying financial statements of RACL GEARTECH LIMITED (‘the Company''),
which comprise the balance sheet as at 31 March 2018, the statement of profit and loss (including other
comprehensive income), the statement of cash flows and the statement of changes in equity for the year then
ended and a summary of the significant accounting policies and other explanatory information.
 
Management’s Responsibility for the Financial Statements
 
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the
Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial
statements that give a true and fair view of the financial position, financial performance including other
comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian
Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian
Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in
India.
 
This responsibility also includes maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal
financial controls, that were operating effectively for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and presentation of the standalone financial statements that
give a true and fair view and are free from material misstatement, whether due to fraud or error.
 
Auditor’s Responsibility
 
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing
standards and matters which are required to be included in the audit report under the provisions of the Act
and the Rules made there under and the Order issued under section 143(11) of the Act.
 
We conducted our audit of the standalone financial statements in accordance with the Standards on
Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone
financial statements are free from material misstatement.
 
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in
the standalone financial statements. The procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud
or error. In making those risk assessments, the auditor considers internal financial control relevant to the
Company''s preparation of the standalone financial statements that give a true and fair view in order to
design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by
the Company''s Directors, as well as evaluating the overall presentation of the standalone financial
statements.
 
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for
our audit opinion on the standalone financial statements.
 
Opinion
 
In our opinion and to the best of our information and according to the explanations given to us, the
aforesaid standalone financial statements give the information required by the Act in the manner so required
and give a true and fair view in conformity with the accounting principles generally accepted in India, of
the state of affairs of the Company as at March 31, 2018, and its profit, total comprehensive income, the
changes in equity and its cash flows for the year ended on that date.
 
Report on Other Legal and Regulatory Requirements
 
1. As required by Section 143(3) of the Act, we report that:
 
(a)    We have sought and obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purposes of our audit.
 
(b)    in our opinion proper books of account as required by law have been kept by the Company so far as
it appears from our examination of those books;
 
(c)    the Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income,
Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with
the books of account.;
 
(d)    in our opinion, the aforesaid standalone financial statements comply with the Indian Accounting
Standards prescribed under section 133 of the Act.
 
(e)    on the basis of the written representations received from the directors as on 31 March 2018 taken
on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being
appointed as a director in terms of Section 164 (2) of the Act;
 
(f)    with respect to the adequacy of the internal financial controls over financial reporting of the
Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure
A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the
Company''s internal financial controls over financial reporting; and
 
(g)    with respect to the other matters to be included in the Auditor''s Report in accordance with Rule
11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our
information and according to the explanations given to us :
 
i.    The company has no pending litigation which would impact its financial position except those
disclosed in financial statements;
 
ii.    The company did not have any long-term contract including derivative contract for which there were
any material foreseeable losses;
 
iii.    There were no amounts which were required by the company to be transferred to the Investor
Education and Protection Fund, and;
 
2. As required by Section 143(3) of the Act, based on our audit we report that:
 
As required by the Companies (Auditor''s Report) Order, 2016 (“the Order”) issued by the
Central Government of India in terms of section 143(11) of the Act, we give in the Annexure B, a statement on
the matters specified in the paragraph 3 and 4 of the Order.
 
ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT
 
(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements'' section
of our report to the Members of RACL GEARTECH LIMITED of even date)
 
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the
Companies Act, 2013 (“the Act”)
 
We have audited the internal financial controls over financial reporting of RACL GEARTECH LIMITED
(“the Company”) as of March 31, 2018 in conjunction with our audit of the financial statements of
the Company for the year ended on that date.
 
Management’s Responsibility for Internal Financial Controls
 
The Company''s management is responsible for establishing and maintaining internal financial controls
based on the internal control over financial reporting criteria established by the Company considering the
essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls
over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities
include the design, implementation and maintenance of adequate internal financial controls that were
operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to
company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the
accuracy and completeness of the accounting records, and the timely preparation of reliable financial
information, as required under the Companies Act, 2013.
 
Auditors’ Responsibility
 
Our responsibility is to express an opinion on the Company''s internal financial controls over financial
reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on
Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the
extent applicable to an audit of internal financial controls, both applicable to an audit of Internal
Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and
the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether adequate internal financial controls over financial reporting was
established and maintained and if such controls operated effectively in all material respects.
 
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal
financial controls system over financial reporting and their operating effectiveness.
 
Our audit of internal financial controls over financial reporting included obtaining an understanding of
internal financial controls over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.
The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error.
 
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
my /our audit opinion on the Company''s internal financial controls system over financial reporting.
 
Meaning of Internal Financial Controls over Financial Reporting
 
A company''s internal financial control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles. A company''s
internal financial control over financial reporting includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with
authorisations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that
could have a material effect on the financial statements.
 
Inherent Limitations of Internal Financial Controls over Financial Reporting
 
Because of the inherent limitations of internal financial controls over financial reporting, including
the possibility of collusion or improper management override of controls, material misstatements due to error
or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls
over financial reporting to future periods are subject to the risk that the internal financial control over
financial reporting may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
 
Opinion
 
In our opinion, the Company has, in all material respects, an adequate internal financial controls system
over financial reporting and such internal financial controls over financial reporting were operating
effectively as at March 31, 2018, based on the internal control over financial reporting criteria established
by the Company considering the essential components of internal control stated in the Guidance Note on Audit
of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of
India.
 
Annexure ‘B’ to the Independent Auditor’s Report of RACL GEARTECH LIMITED for the Year
ended as on 31st March 2018
 
Annexure referred to in paragraph 2 under the heading “Report on Other Legal and Regulatory
 
Requirements” of our report on even date:-
 
i.    a) The company is maintaining proper records showing full particulars, including quantitative
details and situation of fixed assets;
 
b)    According to the information and explanations given to us, the Fixed Assets have been physically
verified by the management at regular intervals and no material discrepancies were noticed on such
verification
 
c)    The title deeds of immoveable properties are held in the name of the company.
 
ii.    The inventories, except for stocks lying with third parties where certificates confirming stocks
have been received in respect of most of the stocks hold, have been physically verified by the management
during the year at reasonable interval. According to information & explanations given to us, the
discrepancies noticed on verification between the physical stock and books record, have been properly dealt
with in the Books of accounts.
 
iii.    According to information & explanations given to us, the Company has not granted any loans,
secured or unsecured to companies, firms, limited liabilities partnership or other parties covered in the
register maintained under section 189 of the Companies Act, 2013. Hence, reporting under clause (a) to (c) of
Para 3(iii) are not applicable. The Company has been pursuing civil suits against Mr. JPS Kanwar for the
recovery of Rs.488.88 lakhs outstanding against him and the same shall be deemed as income of the company as
and when received.
 
iv.    The Company has not entered into any transaction in respect of loans, investments, guarantee and
securities, which attracts compliance to the provisions of the sections 185 and 186 of the Companies Act,
2013. Therefore the paragraph 3(iv) of the Order is not applicable to the company.
 
v.    In our opinion and according to information and explanations given to us, the Company has not
accepted deposits in terms of the provisions of section 73 to 76 of the Companies Act, 2013 and rules framed
there under. Therefore, the paragraph 3(v) of the Order is not applicable to the company.
 
vi.    It has been represented by the management that for the activities carried on by the company, the
Central Government has not specified maintenance of cost records under sub-section (1) of section 148 of the
Companies Act, 2013.
 
vii.    a) According to the information and explanations given to us and on the basis of our examination
of the books of accounts, the company has been generally regular in depositing undisputed statutory dues
including provident fund, employee state insurance, income tax, service tax, value added tax, cess and other
statutory dues during the year with the appropriate authorities. As on 31st March 2018, there are no
undisputed statutory dues payables for period exceeding more than six month from the date they become
payable.
 
b) According to the information and explanations given to us, there were no statutory dues pending in
respect of income tax, sales tax, VAT, custom duty and cess etc. on account of any dispute.
 
viii.    During the year the company has not defaulted in repayment of loans or borrowings to the banks.
The company has not taken any loan or borrowings from any financial institution or Government. The company
has not issued debentures.
 
ix.    Money raised by way of term loan were applied for the purpose for which it was raised. The Company
has not raised money by way of initial public offer or further public offer.
 
x.    According to the information and explanation given to us by the management which have been relied
by us, there were no frauds on or by the company noticed or reported during the period under audit.
 
xi.    In our opinion, the managerial remuneration paid or provided by the company is in accordance with
the provision of section 197 read with Schedule V of the Companies Act 2013..
 
xii.    The company is not a Nidhi Company, therefore para 3(xii) of the Order is not applicable.
 
xiii.    In our opinion and according to the information provided to use, the transaction entered with
the related partied are in compliance with section 177 and 188 of the Act and are disclosed in the financial
statements as required by the applicable accounting standards.
 
xiv.    In our opinion and according to the information provided to us, the company had not made any
preferential allotment or private placement of shares or fully or partly convertible debentures during the
year.
 
xv.    According to the information provided to us, the company has not entered into any non-cash
transaction with directors or the persons connected with him covered under section 192 of the Companies Act
2013. Therefore, paragraph 3(xv) of the Order is not applicable to the company.
 
xvi.    According to the information provided to us, the company is not required to be registered under
section 45IA of the Reserve Bank of India Act, 1934. Therefore, paragraph 3(xvi) of the Order is not
applicable to the company.
 
For Gianender & Associates
 
Chartered Accountants
 
(Firm‘s Registration No. 004661N)
 
Manju Agrawal
 
Partner
 
(M. No. 083878)
 
Place: New Delhi
 
Date : 21st MAY, 2018